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ChartAdvisor

The Weekly Report For May 2nd - May 6th, 2011

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After last week's bear trap was set, the market slowly applied pressure to the bears by logging four straight positive days to close out the week. When the past two weeks are taken into account, the general markets have really been positive almost every single day and have pushed to multiyear highs. There can’t be any doubt that the markets have broken out of their prior bases and other than the low volume, the markets are showing impressive strength. The markets are already overbought though, and as exciting as a new highs is, traders need to remain patient and stick to their trading plans.

 

The S&P 500, as represented by the S&P 500 SPDRS (NYSE:SPY), distanced itself from the $134 level, which was holding it back since February. Now that SPY has broken this level, it should act as support on any weakness. This would be the first level to watch if the markets stall out, but the unfilled gap below near $132 is also worth noting. If the markets were to pull into this area for some reason, it would be a prime area for potential buyers to be lurking.

 

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continue reading at my blog ...

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